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Lid On It hat shop has an inventory turn ratio of 6.2, $1.55 million in annual sales, and $620,000 cost of goods sold for the same annual period. What is its average inventory?a) $100,000b) $250,000c) $62,000d) $75,000

Respuesta :

Answer:

Average inventory will be $100000

So option (a) will be correct option

Explanation:

We have given inventory turn ratio = 6.2

Cost of good sales = $620000

We have find the the average inventory

We know that inventory turn ratio is given by

Inventory turn ratio [tex]=\frac{cost\ of\ goods\ sold}{average\ inventory}[/tex]

So [tex]6.2=\frac{620000}{average\ inventory}[/tex]

Average inventory = $100000

So option (a) will be the correct option